IRS Business Audits Plummet Due to Budget Cuts
 

IRS Business Audits Plummet Due to Budget Cuts

The Internal Revenue Service’s audits of business tax returns have declined steeply in recent years, thanks to successive rounds of budget cuts, according to a new analysis.

Syracuse University’s Transactional Records Access Clearinghouse, or TRAC, analyzed the IRS’s records from fiscal year 2010 through fiscal year 2015 and found revenue agent hours aimed at corporations with $250 million or more in assets have declined 34 percent, while unreported taxes uncovered by the IRS that would otherwise have been lost to the government dropped 64 percent.

The declines were even steeper for the largest corporations, those with $20 billion or more in assets.  Even more recent data through February of 2016 indicate that business audits of large companies are running 22 percent lower this year than for the same period last year.

As a result, the potential loss in government revenue amounts to $15 billion or more a year.

Congress agreed last December to add $290 million to the IRS’s budget for fiscal year 2016 (for a total of $11.23 billion) after five years of budget cuts, but the budget increases were earmarked toward improving taxpayer service, combatting identity theft, and improving cybersecurity, but not for auditing taxpayers.

The full report is available at http://trac.syr.edu/tracirs/latest/416/.  Source:  Accounting Today.